Wednesday, June 8, 2011

ROA Position on Plan to Overhaul Military Retirement

The question below on active duty retirement was recently posed by an ROA member; please see the answer for ROA's response.

Q: Is there any hope of successfully changing the ridiculous active duty retirement benefits in order to reduce the budget strain of expanding personnel costs and gain some parity in military retirement plans at the same time? I hope ROA supports what is obviously going to be an unpopular initiative with the other associations that care more about benefits than increasing national security!

A: First proposed by DoD in 2003 under Secretary Rumsfeld, a suggested retirement plan is still being circulated within the Pentagon that would permit active duty members to “retire” as early as ten years in, allowing them to keep matching funds in a 401(k)-style savings after ten years of service. Those members who serve 20 years would receive full benefits starting at age 57. ROA speculates that some of the resistance to earlier retirement for the Guard and Reserve is this proposal making the active duty retirement closer to the Reserve retirement, thus creating an inverted parity. To sell this concept, those currently serving would be grandfathered, delaying any savings for almost 20 years, unless this would reduce the annual liability where the Pentagon has to contribute to a retirement fund for every member in the military yearly.

ROA has watched this proposal evolve. The Association’s concern is that this proposal would create two tiers of benefits. An older generation of “haves” who continue with current benefits, and a younger generation of “have nots” who would be under the new system. While federal employees did go through a change to their retirement, the federal retirement plan is not for a population that risks their lives to defend the United States on the front lines. Such a change to retirement would create the problematic situation of two soldiers in a fox hole with different benefits. ROA has fought against that situation for decades as we sought parity for the Guard and Reserve.

9 comments:

Anonymous
said...

Frankly based the hostile tone of the question ROA should have ignored the question completely. When you are basically on duty 24/7 once you raise your hand we deserve a reasonable retirement and the current system is fair. I recommend screening out hostile questions next time.

Agree with Anonymous, June 8, 2011 @12:47 PM. Additionally, the answer is not to take away from those receiving reasonable compensation for their work and risk, but to acknowledge the increased risk Reservists currently face. Reservists who put it on the line in the "foxholes" deserve a proportional fair share of these "ridiculous" benefits. The country should not expect to reap peacetime benefits during a time of war. Reservists are absorbing the brunt of continuing the peace time levels of manning.

Anonymous 1247--Reservists are also on call 24/7 they just aren't paid 24/7. The phone rings at anytime here as well as at Active Duty homes, and in reality. Resevists are usually first out the door due to the nature of prior commitments handled day-to-day by our AD counterparts.

Then we should consider a single retirement system for all components based upon the RC age 60 retirement and 2008 NDAA adjustment. Instead of two separate inequitable retirement plans, everyone receives a 90 day reduction in retirement age (from age 60 to no less than age 50) for every 90 day period of active duty. This eliminates age 38 retirees and provides some equity in credit for time served. This may mean serving longer (AC or RC) to collect or leaving and getting another job until the age requirement is met. But it minimizes costs associated with double dipping retirees returning to perform their former military duties as a contractor or civil servant.

Of all the issues that really need attention in Washington, taking care of our military forces should be the priority!! After 31 years as a Reservist and served also active duty time, I am truly amazed how others appear to want to take control of what is left of our future. We have all given so much...yet Reserve have to also pay such high insurance premiums for TriCare if they haven't reached age 60. Why can't things be fair across the board? We have made a committment to serve our country, please assist us in our retirement years.

The ROA position explains why changing the active duty retirement is not 100% perfect but doesn't really explain why it isn't the best option available. Sure, there will be differences in benefits for different year groups; however, how else could you ever fix this issue? As noted, there is no way you could politically get away with changing the retirement plan for those already serving but that isn't a good reason not to change compensation that is overly generous and based on circumstances that are no longer relevant (e.g., life expectancy of soldiers in trenches). The active duty retirement isn't reasonable compensation, it is over compensation and it hurts national security. ROA members need to realize that this isn't a union where we should fight for more benefits even though recruiting and retention is off the charts. Employee compensation packages have to come out of a budget that also pays for the equipment, etc. that everyone so desparately wants.

As an Air Reserve Technician who held dual status, DOD Federal Employee and an Air Force Reservist I was forced out of both of my jobs due to High Year of Tenure. I was able to collect my civilian retirement, however I have to wait until age 60 to collect my Reserve retirement. This was not the rule when I joined in 1971. I also missed out on the new GI bill transfer elgibility for my college age children.Not too many employers out there looking to hire a 55 year old person. If they are going to require you to leave both of your jobs you should be allowed to collect your Reserve retirement at the time your forced out.I was also activated for two and a half years but the early retirement bill was not retroactive back to 9/11, screwed again!

As unpopular as this may come across I believe that the military retirement reform will take place. The details about implementation yet to be determined. This may be the window to finally make Guard/Reserve retirements more equitable with their active duty members by allowing them 3 months for each 90 days of title 10 active duty supporting a contingency since 911. Capping this at age 57 which is the proposed earliest retirement age for active duty members.